The following are the transactions of WEDDINGS “R” US for the month of May.

May 1 Maria Manalo is an entrepreneur and decided to organize a wedding consultancy. She
invested P250,000 into this entity.

1 Rented office space and paid two-months’ rent in advance, P8,000

2 Manalo issued a promissory note for a P210,000 loan from Metrobank. This will be used for
the acquisition of a service vehicle. The note carries a 20% interest per annum. The
arrangement with the bank is that the interest and the principal are payable in full in one
year.

2 Hired an office assistant and an account executive each with a P7.800 monthly salary. Or,
each is to receive P300 per day for the 26-day work month.

4 Acquired service vehicle for P420,000.

4 Paid Prudential Guarantee and Assurance, Inc. P14,400 for a one-year comprehensive
insurance coverage on the service vehicle.

5 Acquired Office Equipment from Fair and Square Emporium for P60,000, paying P15,000 in
cash and the balance next month

8 Purchased supplies on credit for P18,000 from San Jose Merchandising

9 Paid San Jose Merchandising P10,000 of the amount owed.

10 Coordinated and finalized simple bridal arrangements for three couples and collected fees
of P8,800 per couple

13 Paid salaries, P6,600. The entity pays salaries every two Saturdays.

15 The entity is earning additional revenues by referring consulting clients to friendly hotels
and caterers. Received P10,000 advance fees for three clients referred.

19 Coordinated and finalized elaborate bridal arrangements for three couples and billed fees of
P12,000 per couple.

25 Manalo withdrew P14,000 for personal expenses

27 Paid salaries, P7,200

30 Received ICC-BayanTel telephone bill, P1,400.

30 Received P24,000 from two-clients for services billed last May 19.

31 Settled the electricity bill of P3,000 for the month.

The Chart of Accounts of Weddings “R” Us:

Balance Sheet Accounts Income Statement Accounts

ASSETS INCOME
Cash Consulting Revenues
Accounts receivable Referral Revenues
Supplies EXPENSES
Prepaid Rent Salaries Expense
Prepaid Insurance Supplies Expense
Service vehicle Rent Expense
Accumulated Depreciation Insurance Expense
LIABILITIES Utilities Expense
Notes Payable Depreciation Expense – Service Vehicle
Accounts Payable Depreciation Expense – Office Equipment
Salaries Payable Miscellaneous Expense
Utilities Payable Interest Expense
Interest Payable
Unearned Referral Revenues
OWNER’S EQUITY
Manalo, Capital
Manalo, Withdrawals
Income Summary

The following information is also available:

1. The entity estimated that the service vehicle bought on May 4 will last for seven years and with
a salvage value of P84,000. The Office Equipment which was acquired on May 5 will have a
useful life of five years and will be worthless at that time.
2. The entity agreed to arrange a rush civil wedding in May31 and charged P5,300 for the services,
which is earned but unbilled.

Required:

1. Journal Entries
2. Posting through T-accounts
3. Trial Balance
4. Adjusting Entries
5. Adjusted Trial Balance